October 2015

October 18, 2015

Brazil's political establishment is in crisis as parties grapple for the highest levels of power amid a serious economic downturn. Brasilia is experiencing its own version of "House of Cards," a situation that could potentially have ramifications in Latin America and even globally.

In this real-life drama with new twists seemingly every week, President Dilma Rousseff is trying to stay in office as the opposition pushes for impeachment. The country's first female president stands accused of fiscal irregularities and of possibly receiving campaign donations stemming from a massive corruption scandal within Petrobras, the state-run oil company. While not under investigation herself in the so-called Operation Car Wash, Rousseff was chairwoman of Petrobras during the time the bribery scheme took place.

Rousseff and her vice president at her second inauguration.

Meanwhile, Chamber of Deputies leader Eduardo Cunha is embroiled in the Petrobras scandal, accused of taking millions in bribes, but he has stood his ground and held fast to his seat. He's the person responsible for starting the impeachment process, and also the second in line to take over the presidency if an impeachment took place. The government may be trying to make a deal with him to allow him to stay if he agrees not to push for impeachment. Last week, Rousseff characterized the opposition's actions as "coup" attempts, and found herself defending her legitimacy on live TV.

The crisis hasn't come out of nowhere. The Petrobras scandal broke in 2014 and the investigation has expanding ever since. Last year, the president won reelection in one of the closest elections in recent Brazilian history, capping off an extraordinarily divisive campaign season that saw not only over-the-top rhetoric from candidates and party faithful but also sparked bitter arguments among ordinary Brazilians. On the campaign trail, one of the top presidential contenders - and one seen as a moderating voice - died in a freak plane crash.

Congressional leaders Cunha and Calheiros, both accused of corruption.

As she loses ground even within her own party, Rousseff is hoping to keep her coalition intact - not only to prevent an impeachment, but also to push through austerity measures as the government faces a sinking economy. This month, she rearranged her cabinet, giving more power to the centrist PMDB party that's holding the coalition together. The vice president, Michel Temer, belongs to the PMDB, and he has reportedly already begun distancing himself from Rousseff. He would be first in line to take over if an impeachment took place.

Public opinion isn't on Rousseff's side. She's seen record, single-digit approval ratings, and a July poll found that more than 60 percent of Brazilians support impeaching the president. Several large anti-government demonstrations took place this year.

The country is suffering a recession, with inflation and unemployment rising. Now the government is pushing for budget cuts and tax increases, all as the political crisis heats up. The latest is that a Supreme Court injunction is blocking a lower house impeachment vote, but the fight isn't over. Impeachment is not an impossible outcome: the last Brazilian presidential impeachment took place in the early 1990s.

Aside from credit rating downgrades, the perfect storm of the political and economic crises threaten more than Brazil's international reputation. With the largest economy and democracy in Latin America, Brazil has been a beacon of stability in the region and in the developing world. The country has also become even more connected to the global economy, with growing trade and investment ties not just among the BRICS but also to the U.S. and Europe. Political upheaval could have consequences beyond Brazil's borders.

With Rousseff fighting for her job and struggling to get anything substantial through Congress, there's been a flurry of activity among those jockeying for power. The PMDB recently released this incredibly tone-deaf, 10-minute ad positioning itself as an alternative to Rousseff. (The video features Vice President Temer, but also stars politicians like Cunha and Senate President Renan Calheiros, both accused of corruption.)

Plus, former President Lula has hinted he may run for a third term in 2018. Lula, who enjoyed popularity throughout his two terms, hand-picked Rousseff as his successor, and sometimes acts as an unofficial adviser. The crisis could actually be good for him - letting the dust settle before he sweeps in to pick up the pieces.

But at the moment, it's unclear if there's anyone in line for Rousseff's job seriously interested in the business of governing, and impeachment could further drag down the country's political progress and economy. This TV-worthy drama isn't over yet, and the next few months could be decisive in determining Rousseff's - and Brazil's - fate.